United States v. James Thornberg

United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 02-2258
___________
United States of America, *
*
Plaintiff-Appellee, *
*
v. *
* Appeal from the United States
James Edward Thornberg, * District Court for the
also known as Samuel James Thornberg,* District of South Dakota.
also known as Samuel James Colby, *
also known as James Edward Thornbag, *
also known as Robert Johnson, *
also known as George Swenson, *
*
Defendant-Appellant. *
___________
Submitted: March 12, 2003
Filed: April 29, 2003
___________
Before HANSEN, Chief Judge,1 LOKEN and MURPHY, Circuit Judges.
___________
MURPHY, Circuit Judge.
James Edward Thornberg pled guilty to wire fraud, in violation of 18 U.S.C.
1
The Honorable David R. Hansen stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on March 31,
2003. He has been succeeded by the Honorable James B. Loken.
§ 1343, and money laundering, in violation of 18 U.S.C. § 1956(a)(1)(A)(i). The
district court2 sentenced him to 96 months after departing upward from the sentencing
guidelines. Thornberg appeals, and we affirm.
Throughout 1998 James Thornberg engaged in an elaborate scheme to sell
ethanol powered vehicles. The vehicles did not actually exist, but Thornberg and his
accomplice created false press releases, color brochures, specification sheets, and
invoices about them. They offered vehicles powered completely by ethanol and
capable of traveling over 1000 miles on one tank of fuel. Victims of the fraud were
induced to furnish down payments on the vehicles, and more than $65,000 had been
mailed or wired to Thornberg before the scheme was uncovered. The vehicles were
never produced, and the down payments were never returned.
At the time Thornberg was arrested in November 2001, he was also operating
a business called Bell Corporation. This entity purported to distribute storage
structures throughout the Western Hemisphere and to do more than $40,000,000 in
business annually. Thornberg later admitted that his only financial asset was a used
car worth $5000. The voice mail service for Bell Corporation continued to be
operational into at least the first half of 2002.
In January 2002, Thornberg was indicted on twenty two felony charges: one
count of conspiracy, in violation of 18 U.S.C. § 371, seven counts of mail fraud, in
violation of 18 U.S.C. § 1341, five counts of wire fraud, in violation of 18 U.S.C.
§ 1343, and nine counts of money laundering, in violation of 18 U.S.C.
§ 1956(a)(1)(A)(i). Thornberg entered into a plea agreement, which was not binding
on the court, under which he would plead guilty to one count of wire fraud and one
count of money laundering. The United States agreed in return to dismiss the twenty
2
The Honorable Charles B. Kornmann, United States District Judge for the
District of South Dakota.
-2-
other counts of the indictment and to recommend that Thornberg receive a reduction
in his offense level for acceptance of responsibility and that he be sentenced within
the guideline range determined by the district court.
In researching Thornberg's criminal history for the presentence investigation
report (PSR), the United States Probation Office learned that among his convictions
was one for a California battery. Thornberg urged the Probation Office not to count
the battery conviction when calculating his criminal history, reporting that it had been
dismissed upon his completion of an anger management course. The investigation
by the Probation Office revealed that the battery charge had indeed been dismissed,
but only after Thornberg had submitted to the court a letter and certificate of course
completion signed by John W. Venutti, identified as a psychologist. Further
investigation revealed that Venutti was an alias used by Thornberg and that the
documents submitted to the court in California were false. The battery was then
counted in calculating Thornberg's criminal history.
Thornberg came before the district court for sentencing on April 29, 2002. The
court increased his offense level by four levels under § 2B1.1 of the sentencing
guidelines because the wire fraud had involved sophisticated means and false pieces
of identification. See United States Sentencing Commission, Guidelines Manual,
§ 2B1.1(b)(8)(C), (b)(9)(C)(i) (Nov. 2001) [USSG]. Because of his
misrepresentations about his battery conviction and supposed completion of an anger
management course, the court imposed a two level enhancement for obstruction of
justice under § 3C1.1 and declined to award a reduction for acceptance of
responsibility under § 3E1.1. See USSG §§ 3C1.1, 3E1.1. His adjusted offense level
was calculated to be 22.
The court found that criminal history category III did not adequately reflect the
seriousness of Thornberg's past criminal conduct or the likelihood that he would
commit future crimes. Describing Thornberg as "a classic con man, and a crook of
-3-
long standing throughout his lifetime," the court departed upward under USSG
§ 4A1.3 to criminal history category V, which provides a sentencing range of 77 to
96 months for an offense level of 22, id. Ch.5, Pt.A. Thornberg was sentenced at the
high end of the range, to 60 months on the wire fraud count and 36 months for money
laundering, to be served consecutively. Pursuant to 18 U.S.C. § 3553(c), the district
court provided a written statement of its reasons for departing from the guidelines.
On appeal, Thornberg argues that the district court erred in departing upward.
First, he contends that the upward departure resulted in an unreasonable sentence and
was unwarranted because the facts did not differentiate him from the typical offender
falling within criminal history category III. Second, he contends that the district court
improperly engaged in double counting by using the same conduct to increase his
offense level and to depart upward from the guidelines. Finally, Thornberg argues
that in increasing his criminal history by two categories, the district court failed to
compare his criminal history with the criminal histories of other offenders at each
step.3 In reviewing a departure from the guidelines, we "ask whether the sentencing
court abused its discretion." Koon v. United States, 518 U.S. 81, 91 (1996); see also
United States v. Herr, 202 F.3d 1014, 1015 (8th Cir. 2000) ("We review the district
court's upward departure under a unitary abuse-of-discretion standard.").4
3
In his reply brief Thornberg raises an additional argument for the first time.
He contends that the government should be estopped from supporting the upward
departure because it had promised to recommend to the district court a sentence
within the guideline range. We note that the plea agreement provided that the
government would recommend a sentence within the guideline range calculated by
the district court, and the agreement apparently said nothing about limiting the
government on an appeal. Moreover, it is well settled that we will not consider an
argument raised for the first time in a reply brief. Navarijo-Barrios v. Ashcroft, 322
F.3d 561, 564 n.1 (8th Cir. 2003).
4
Congress has recently passed legislation, to become effective when signed by
the president, which amends 18 U.S.C. § 3742(e) and affects the standard of appellate
review for sentencing guideline issues, including departures. See PROTECT Act, S.
-4-
Section 4A1.3 permits a court to depart upward if "reliable information
indicates that the criminal history category does not adequately reflect the seriousness
of the defendant's past criminal conduct or the likelihood that the defendant will
commit other crimes." USSG § 4A1.3, p.s. In this case, the record supports both the
district court's conclusion that category III was insufficient and the reasonableness
of the sentence imposed.
The PSR, to which Thornberg did not object, revealed that Thornberg had
previously been convicted of 17 counts of mail fraud for which he was sentenced to
96 months in federal prison; had failed to appear in the courts of at least two different
states after being charged with grand theft and embezzlement in South Dakota and
gross misdemeanor theft in Minnesota; had been associated with a multitude of
business, some owing millions of dollars to unsecured creditors; had operated a
foundation that was shut down by Minnesota authorities for using fraud,
misrepresentation, and deceptive practices; had claimed to have posttraumatic stress
disorder from service in Vietnam even though he had never served in any branch of
the military; and had used at least six false social security numbers and numerous
aliases in the course of his operations. The PSR also showed that, at the time of his
arrest, Thornberg was operating Bell Corporation, which falsely claimed to transact
over $40,000,000 in annual business, and that he subsequently tried to deceive the
court about the disposition of a prior conviction.
Thornberg argues that much of his history does not differentiate him from a
151, 108th Cong. § 401(d)(1), (2) (2003). Since the district court did not commit
clear error in its fact finding [§ 3742(e)], gave written reasons for its departure
[PROTECT Act sec. 401(d)(1), § 3742(e)(3)(A)], did not base its departure on an
impermissible factor [id. sec. 401(d)(1), § 3742(e)(3)(B)], and did not abuse its
discretion in determining that the sentence was reasonable [id. sec. 401(d)(1),
§ 3742(e)(3)(C); id. § 401(d)(2)], we would also affirm under the PROTECT Act.
See also id. sec. 401(d)(3)(C), § 3742(f)(2).
-5-
typical category III offender. He contends that fraud has not been proven against Bell
Corporation or the 50 other businesses associated with him, that the existence of an
active voice mail account did not prove that he was continuing to operate Bell
Corporation while incarcerated, and that several of the alleged aliases were actually
just the names of prior users of his mailbox. Thornberg's argument fails to take into
account that § 4A1.3 only requires that a sentencing court base a departure on reliable
information. The facts described in the PSR were not disputed or objected to, and
they represent reliable information indicating that Thornberg had been engaged in
continuing fraudulent conduct and was likely to victimize others in the future if not
deterred. Cf. United States v. Vagenas, 318 F.3d 819, 821 (8th Cir. 2003) (§ 4A1.3
upward departure appropriate "where there is evidence of obvious incorrigibility"
(internal quotation marks omitted)). Moreover, if the district court had not departed
upward, Thornberg would have received a sentence lower than his prior mail fraud
sentence. That would have been contrary to the intent of the guidelines "'that a clear
message be sent to society that repeated criminal behavior will aggravate the need for
punishment with each recurrence.'" Id. (quoting USSG Ch.4, Pt.A, intro. comment.).
Thornberg also argues that the district court erred in departing upward pursuant
to § 4A1.3 because his use of fake names, identifications, passports, and businesses
had already been accounted for by the offense level adjustments imposed under
§ 2B1.1. We are not persuaded by this argument. The guidelines embody the notion
that the severity of a sentence should be determined both by the seriousness of the
offense (reflected by the base offense level inquiry under chapter two) and by "the
offender and the need to deter him from further criminal activity" (as assessed by the
criminal history score calculated under chapter four). United States v. Saffeels, 39
F.3d 833, 836 (8th Cir. 1994). In light of these dual considerations, it is permissible
to use the same conduct "as the predicate both for establishing a defendant's base
offense level . . . and for calculating his criminal history category." Id. This same
reasoning holds true when the conduct that has been used to establish the offense
level is also used to assess the need for an upward departure under § 4A1.3. See
-6-
United States v. Thin Elk, 321 F.3d 704, 708 n.3 (8th Cir. 2003) ("'[T]he court may
depart from the guidelines, even though the reason for departure is taken into
consideration in determining the guideline range . . . .'" (quoting USSG § 5K2.0,
p.s.)). In this case, the false pieces of identification and business names were relevant
both to establish Thornberg's offense level under § 2B1.1 and to determine the
adequacy of his criminal history category under § 4A1.3. We therefore conclude that
the district court did not engage in impermissible double counting by departing
upward.
Thornberg also argues that the district court did not adequately explain why it
passed over criminal history category IV when it departed from category III to V.
The district court was not required to "specifically mention that it had considered
each intermediate criminal history category." United States v. Collins, 104 F.3d 143,
145 (8th Cir. 1997). Instead, a court must adequately "explain and support the
departure," id., and the district court did so in this case. Drawing on the PSR, it noted
Thornberg's failure to reform after his prior mail fraud conviction, possession of
several fake passports and false social security numbers, use of multiple aliases,
association with over 50 different business names, and possible preparation to commit
further fraud with Bell Corporation. The district court did not err in its application
of § 4A1.3.
For these reasons and because we conclude that the district court did not err in
departing upward and that its sentence was reasonable, we affirm the judgment.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
-7-